Wilkens Company Wilkens Company wants to determine the cost behavior pattern of maintenance costs. Wilkens has decided to use linear regression by employing the equation y = a + bx for maintenance costs. The prior year's data regarding maintenance hours and costs, are given in the data below.

	Hours of Activity	Maintenance cost
January	490	5,700
February	325	4,210
March	425	5,050
April	360	4,510
May	500	5,680
June	450	5,260
July	425	5,050
August	375	4,630
September	470	5,420
October	485	5,550
November	365	4,550
December	350	4,250
total	5,020	59,860

1a. Solve for A and B variable provide the graph (scatter gram) show trend line, formula, and R-Squared.

A
B
"R-SQUARED"

1b. Refer to the Wilkens Company. Based upon the data derived from the regression analysis, what maintenance costs should be budgeted for a month in which 485 maintenance hours will be worked?

1c. Refer to the Wilkens Company. What is the percentage of the total variance that can be explained by the regression equation?

1d. What is meant by cost behavior? Explain how it relates to the following terms: fixed, variable, and mixed cost.